British Airways Case

British Airways actually started out as two separate airways and In August 1971, the Civil Aviation Act became law and set the stage for the British Airways Board to assume control of two state-run airlines, British European Airways (BEA) and British Overseas Airways Corporation (BOAC) under the name of British Airways. Although both airlines were autonomous, each with its own chairman, board and chief executive, they fell under the same name.

Both Airways were more concerned with flying the British Flag than really making the business profitable, they had been injected with a military mentality instead of serving a need to the public. No one really had their own job to do; they were all busy doing everyone else's job. The culture and thought process was like this, because they thought that since they were considered a civil service agency that the airline was allowed to become inefficient. This was all in part because the thinking and culture was that this was a state-run operation and it was ok. As one senior manager commented "Productivity was not an issue, as long as you were providing service at no cost to the taxpayer, then you're doing quite well"

Service was pretty poor and productivity in the 70's was really bad in contrast to the other foreign airlines. There was no customer focus and employees were actually embarrassed to say that they worked for BA.

BA desperately needed change and when Sir John King was appointed chairman in February 1981, he was a man who was noted for having a successful history of business ventures and strong ties to both the government and business communities. King initiated a survival plan and between 1981 and 1983 reduced its staff by 25 percent. King did this by offering outstanding severance packages and the change was welcomed by the staff. The existing staff needed a leader and making changes weren't so difficult, they wanted a company to be proud of to say they were working for and couldn't until King came on board. New employees were hired to make changes and some of the changes put into place changed BA greatly. Marshall, who was a new member of the team, initiated a new program called "Putting People First" (PPF). This was a program that was given to frontline staff from December 1983 thru June 1984 and it was so well receptive that non front line employees wanted to attend. This program ran through June 1985 and around 40,000 BA employees went through the program. It urged participants to examine their interactions with other people, including family, friends, and, by association, customers. Its acceptance and impact was extraordinary, due primarily to the honesty of its message, the excellence of its deliver, and the strong support of management. As one senior manager said, "It's quite a revelation, and was absolutely wonderful". BA had finally woken and realized where its bread was buttered. Although they encountered a lot of cynics at the time, the staff was exhilarated to realize that they were working for an airline that had the guts to change and that it's probably somewhere where you want to stay.

BA had a huge sense of urgency due to the fact that they were going bankrupt. They needed change and they needed it fast. Due to declining profits and the crisis of 1981, where Roy Watts issued a special bulletin stating that they had piled up millions in debt and unless they took decisive action right now that they will definitely go out of business.

BA desperately needed